Report: Home Security Penetration to Reach 28% by 2016

Xfinity recently launched Xfinity Control, a DIY security and home automation system costing $10 per month.

By Jason Knott, June 12, 2013

In the case of residential security, industry analysts think more competition is good. IMS Research (NYSE: IHS), is predicting that monitored (both professionally and self-monitored) home security penetration will rise between 5 percent and 8 percent over the next three years due to the “sudden influx” of new players that will boost consumer awareness.

“The penetration rate of intrusion systems in the U.S. has hovered around the 20 percent mark for some time,” says Adi Pavlovic, security and fire analyst for IHS. “The emergence of new market entrants, such as telecommunications companies, is expected to increase end-user awareness of home management systems, which combine traditional home security products with innovative home automation technology.”

While home automation features are driving the penetration of integrated home management systems, the core functionality consists of a basic intrusion system.

Telcos, cable companies and retailers are now competing—successfully for the first time—against traditional security installation and service companies like ADT.

Leveraging their existing client base, telecommunications providers are offering home management systems in order to increase their average revenue per user (ARPU). Combining these newer offerings in addition to pre-existing services such as cable, Internet and telephone is becoming an attractive and cost-effective way to entice end users, thus driving the uptake of security products, according to IMS. Most new entrants have partnered with existing professional monitoring companies, while some have decided to launch their own monitoring stations.

Verizon, Lowe’s and now Xfinity offer security and home automation systems for self-monitoring for about $10 per month.

Lowe’s recently partnered with Verizon to sell Lowe’s Iris product line alongside Verizon’s home security solutions in Verizon stores across the United States.

Although the use of do-it-yourself and self-monitoring systems remains a small portion of the market today, the potential remains high considering the number of smart phone users and home owners/renters that may not want to spend on a professionally monitored system.

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About the Author

Jason Knott, Editor, CE Pro

Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California.